On December 14, 2011, the Centers for Medicare & Medicaid Services (“CMS”) released the long-awaited Proposed Rule for implementing the so-called “Sunshine Act” physician payment reporting requirements. These proposed regulations provide some additional clarity regarding the reporting obligations for most drug and device manufacturers, contained in Section 6002 of the Affordable Care Act (“the Act”). The Act will require most drug and device manufacturers to file annual disclosure reports detailing their financial relationships with physicians and teaching hospitals.

The Proposed Rule addresses the following key issues:

•When the compliance requirements go into effect

•What entities will be “Applicable Manufacturers” and thus covered by the Rule

•What types of drugs, devices and other items are covered by the Rule

•What types of financial relationships have to be disclosed

•How those financial relationships must be reported